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Scotland this month and looking ahead

Caroline Coyle highlights the key issues dominating the legal landscape in Scotland this month.

 

April 2016

Claims trends in Scotland – on the increase

Volume of

Claims              Financial Year

 

 

Country

2011 - 2012

2012 - 2013

2013 - 2014

2014- 2015

2015-  29/2/16

England

939,785

946,039

917,644

901,644

822,329

Scotland

44,685

46,605

46,619

47,515

47,762                                                                                                      

Claims registered by CRU from 1st April 2011 to 29th February 2016

This interesting data obtained by DWF under a Freedom of Information request shows quite clearly that the claims market inScotland is increasing quite significantly over a period when the volume of claims is decreasing in England.

Rates of change in each jurisdiction

  • Grossing up for the current year i.e. assuming the same rate of claim in the current year continued to 31 March, then total claims in England in the current year were 897,086 which means claims in England have decreased by 4.5% over the period.
  • In the same period, and making the same assumption, claims in Scotland have increased to 5,210 or by 16.6%.  There are now on average 7,419 more claims a year in Scotland than there were four years ago.  In other words there are 20 additional new claims a day made in Scotland when compared to 2011/12.

Scottish claims as a percentage of England

  • In 2011/12, Scottish claims were 4.7% of the total in England.
  • In the current year to date, the rate of claim in Scotland had increased to 5.8% of England.

The reason for this is the extension of claimant practices developed in England into Scotland, and the extension of claimant operations into that jurisdiction. This is likely to become more common if and when the Autumn Statement reforms are brought forward as they will not impact on Scotland, so the pursuit of Scottish claims will become more attractive.

Ratios – However, it is also worthy of note that the most recently published figures from the Institute and Faculty of Actuaries show the property damage/PI claims ratio was still only around 20% for Scotland,  less than half of what some areas of North West England are recording.  So although the volumes of new claims are on the increase, the Scottish population has not yet become as fertile territory as some parts of England in which claims can be farmed.

Cases of interest

Disease - The case of Roger Harris v The Advocate General as representing The Ministry of Defence [2016] CSOH 49 is the first judicial decision in Scotland to assess the quantification of a full and final award for damages for pleural plaques since the House of Lords decision in Rothwell and the enactment of the Damages (Asbestos Related Conditions) (Scotland) Act 2009.

It was agreed by the parties that Mr Harris had an increased risk of developing mesothelioma during lifetime assessed at 5% and, in addition, an increased risk of 0.2% of developing asbestos related lung cancer, a cumulative risk of 5.2%.

Lord Boyd held that the appropriate award for provisional damages was £7,500 and accepted the method suggested by pursuer’s counsel in quantifying the future risk element to the pursuer and adopted the figures suggested by the pursuer.  In doing so he stated: -

There is one injury but there are different risks. I see nothing wrong in assessing the risks that flow from the one injury and aggregating this provided care is taken not to double count.

The impact this decision will have on insurers is evident.  The court have assessed full and final damages at a figure almost double the sum which would have been payable under the Framework agreement.  Whilst early indications suggest an enhanced Framework Agreement is desirable from the perspective of some pursuer solicitors and defender solicitors, the likelihood is more claimants will seek to have their claims assessed on an individual basis, relying on the methodology adopted by the court rather than accepting a global lump sum figure. Insurers must now be aware to the fact that pleural plaques damages, where full and final awards are sought, are now likely to reach five figure sums.

Sanction for Counsel – Interesting and useful comments on sanction for counsel.

On 18th and 21st March 2016 the All Scotland Personal Injury Court issued the first judgments under the Court Reform (Scotland) Act 2014 on sanction for Counsel.

In both cases, the pursuers moved the court for sanction for the employment of counsel. The test for sanction is governed by s.108(3)(a) of the 2014 Act. When being asked to grant Sanction the Court must have regard to the difficulty or complexity, or likely difficulty or likely complexity, of the proceedings, the importance or value of any claim in the proceedings, and the desirability of ensuring that no party gains an unfair advantage by virtue of the employment of counsel.

Dow v M & D Crolla Ltd [2016] SC ED 21

View judgment

Counsel for the pursuer argued that the figure tendered was some three times the pursuer’s annual salary, the pursuer’s employer was undergoing a restructuring process and the pursuer could therefore lose her job. Counsel had produced valuations on various scenarios from nil to £116,000. The decision to instruct counsel was therefore proportionate. The agent for the defender submitted that the question of disadvantage was not particularly complicated. The pursuer’s agent could have conducted straightforward investigations with the pursuer’s employer to resolve the issue and it was therefore not necessary for counsel to have been instructed. Sheriff Reith granted sanction for counsel. The Sheriff considered that the complexity raised by the issue of disadvantage merited the instruction of counsel. The Sheriff also accepted that the importance and value of the claim to the pursuer was such that sanction should be granted.

V on behalf of J v M & D (Leisure) Ltd [2016] SC ED 22

View judgment

Counsel for the pursuer argued that the employment of Counsel was merited on several grounds e.g. liability was disputed, the case was important to J, who was very young (and had suffered permanent disfigurement) and taking the evidence of and consulting with such a young pursuer was of sufficient difficulty and complexity. Sheriff Braid granted sanction for counsel. The Sheriff considered that the action was not of sufficient complexity or value to justify the instruction of counsel on their own. However, he concluded that the pursuer being a child added sufficient difficulty to the action that sanction was appropriate.

The Sheriffs are clear to note that their ultimate decisions are based on the facts of each particular case. However, there are several points of interest which may prove to be of general application. The level of counsel’s involvement and the reason for that involvement are likely to be key. Considerations that will be in the forefront of the Sheriffs mind will be the complexity of the case/issue, the important nature of the proceedings to the pursuer and if relevant the vulnerable nature of the pursuer.

Government Consultations / Legislation

Consultations

A Public Consultation on Draft Proposals for a “No-blame” Redress Scheme for Harm Resulting from Clinical Treatment. View consultation >

In Scotland the Government has published a consultation for a no-blame redress scheme for medical negligence claims. The change is not semantic: no-blame does not mean no-fault. Compensation would be founded on the concept of ‘avoidability’: could the harm have been avoided by the use of reasonable care? The patient will only be compensated if they suffered harm lasting at least six months, causally connected to the avoidable harm and there will be a cap of £100,000. The need to prove causation puts the patient in the same position as under the present law.

Crucially and rather strangely, the right to litigate remains. Those who feel under-compensated can pursue a court action to ‘top up’ their damages. Patients will be prevented from using their no-blame award to fund a litigated claim.

In the face of a sharp rise in clinical negligence claims in Scotland (over 200%) (Herald Scotland) insurers will no doubt welcome steps to reduce protracted litigation and unnecessary expense and while it is far from clear how this proposal would accomplish that, the consultations and resultant discussions must surely be encouraged.

Current Bills

The Limitation (Childhood Abuse) (Scotland) Bill (“the Bill”). The Bill amends section 17 of the Prescription and Limitation (Scotland) Act 1973 (“the 1973 Act”). It removes the 3 year limitation period for personal injuries actions resulting from abuse when the person who sustained the injuries was a child at the time of the abuse. It applies to abuse occurring before and after commencement of the provisions. The bill is likely to come into force later this year. 

The Lobbying Bill, which will seek to regulate the way lobbying take place and will introduce a register for activities to be recorded,passed the stage three debates last month, receiving royal ascent on 14th April and will be implemented during October 2016.

New legislation

The Apologies Bill received Royal Assent on 23 February 2016 to become the Apologies (Scotland) Act 2016 which will stop apologies from being used as evidence of liability in most civil legal proceedings and is similar to Section 2 of the Compensation Act 2006 in England and Wales.

The Scotland Bill – The Scotland Act 2016 has received Royal Assent on 23rd March and is now law.  The Scotland Act 2016 is seen by some to fulfil the commitments made by the UK government to devolve substantial powers to the Scottish Parliament. These will include the ability to set income tax rates and thresholds, control over more of the welfare system and a range of other measures.

Scottish Civil Justice Council (SCJC)

The Costs and Funding Committee – Continue to work on the implementation of Sheriff Principal Taylor’s Review of Expenses and Funding of Civil Litigation in Scotland.

The Access to Justice Committee – the committee is currently consulting on the draft simple procedure rules which will replace the small claims and summary cause procedures in the sheriff court.  These rules are likely to be implemented in October 2016.

The Personal Injury Committee – in February the committee agreed to move forward with the introduction of compulsory personal injury protocol and it is believed this is likely to happen in September/October 2016.  It will be for motor claims only up to £25,000 and will exclude fatal claims.  They are also reviewing personal injury simple procedure, for implementation along with the new simple procedure rules and is developing a clinical negligence pre-action protocol.

Scottish Law Commission

Law of prescription - The Scottish Law Commission has published a consultation which aims to review time bars on civil actions in Scottish Courts. The issue of prescription in relation to claims for latent damage is of particular interest following the decision of the Supreme Court in the case of David T Morrison & Co Ltd v ICL Plastics Ltd in 2014, but the consultation is looking at other aspects of the law of prescription as well. The consultation runs until 23rd May. View consultation > 

Defamation - The Scottish Law Commission has published a discussion paper on defamation law.  The project emerged from modernisation of the law in England and Wales in 2013, where changes were made to tackle “libel tourism”; claims being brought in the English courts on the back of minimal publication.  Defamation law is not only of interest and importance to insurers, newspapers, broadcasters and commercial publishers; it can potentially affect everyone. With the phenomenal growth in social media and the internet many people now communicate more openly and rapidly on a whole range of issues to a much greater extent than was previously possible. The consultation runs until 17th June. View consultation >

Insurable Interest – it has been felt that the law in relation to insurable interest is restrictive and has had the effect of inhibiting the insurance market’s ability to write particular types of product for which there is demand.  In the second half of this year, the SLC will publish a joint report and draft Bill on insurable interest in an effort to remove hurdles from insurers selling products that get complicated with concerns over insurable interest.  There is a working draft of the bill available at present. View >

Damages for late payment - The Law Commissions' recommended clauses on late payment of insurance claims have been introduced into the UK Parliament as part of the Enterprise Bill.  Although these clauses were considered unsuitable for the special parliamentary procedure for Law Commission Bills (and therefore were not included in what is now the Insurance Act 2015), the Government was supportive of the policy and undertook to bring the provisions forward at a future legislative opportunity. The Enterprise Bill has presented that opportunity. View >

If the clauses are implemented, the Insurance Act 2015 will be amended to include these provisions. 

Other notable activity

 

Historic abuse in care

The Public inquiry into child abuse is set to be costliest in Scottish history.

Already, Scotland’s Child Abuse Inquiry (CAI) has cost over £600,000 and is predicted to exceed previous hearings by millions.

The investigation into Clostridium.difficile infections cost £10.7 million while the Penrose inquiry into contaminated blood cost over £12m.

The inquiry will look at physical and sexual abuse in addition to emotional distress suffered by people in foster and residential care.

Ms O’Brien explained the inquiry will begin with private hearings before moving on to public ones. Names of alleged victims and abusers will be redacted initially and the team will travel around the UK, speaking to people in “small, quiet and comfortable” hotel rooms.

New rules on bin lorries to be introduced in wake of FAI

New rules governing bin lorries are to be introduced following the fatal accident inquiry (FAI) into the 2014 Glasgow bin lorry crash that killed six pedestrians.  More than ten fatalities have occurred since November 2014 involving pedestrians being knocked down by bin lorries. Sheriff John Beckett made 19 recommendations at the conclusion of the FAI.  Five of these were for driver Harry Clarke’s employers and two for all local authorities.  The council said it had already made changes before Sheriff Beckett’s determination. For example, large bin lorries had been removed from pedestrian areas after some people reacted angrily towards them following the crash.  Crews will be given training in the use of driver controls and stronger health screening measures are to be brought in by Glasgow City Council.  Sheriff Beckett also said councils should buy bin lorries with “advanced emergency breaking systems” or have this system retrofitted.

Contact

For further information please contact Andrew Lothian, Head of General Insurance (Scotland) on 0131 474 2305, Caroline Coyle, Associate on 0141 228 8132 or Andrew McConnell, Senior Solicitor on 0141 228 8034.

 

By Alex Fusco

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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